AAPL - Apple Inc.

[rkbabang]

Does Amazon own patents on e-ink readers? I wouldn't mind seeing Apple release an e-ink reader, or even an iPad that can alternate between e-ink and Color LCD.

 

I love being able to read in e-ink my Kindle, but the UI, touchscreen, and web browsing are crap. The Kindle library is their real asset, but Apple could make iBooks better if they put some effort into it.

 

Amazon buys its e-ink screens from E InK (www.eink.com) just like everyone else.  I have a Kobo ereader and there are others as well.  The reason I don't use a Kindle is because I have a few thousand ebooks in epub format and Kindle doesn't support it.  The Kobo ereader supports epub and mobi as well as others (pdf, etc).  The Kobo ereader has an excellent screen and format support, but suffers from an almost unusable OS.  I have to connect it to my computer and put only a handful of books on it at a time, because sifting through a thousand books on the device is so tedious that it is almost impossible.  I have them all sorted on my computer in directories by genre and then by author.  I put that whole directory structure onto the device and all the books just end up in my library all together.  I don't know what using a Kindle is like, but the Kobo is awful in that regard.  You can select a book and add it to a "shelf", but that is a slow and painful process (the touch screen isn't as responsive as a smartphone or tablet), it would be nice if it read the directory structure and did that for you, or there was someway to do it through the computer when it was connected, but there isn't.  Anyway, if Apple came out with an e-ink reader that made things easier, I'd buy it in a second at almost any price.

 

[DCG]

The touch screen on the Kindle is pretty bad. It's fine for touching it to advance to the next/previous page, but trying to use the touch screen keyboard is pretty brutal. I read mostly non-fiction, and frequently want to open a web browser to check something, but end up grabbing my iPad for that.

 

 

Reading on the iPad is a good experience from that perspective (especially an iPad mini), but I stare at a computer screen all day long; I like reading books on e-ink.

 

-I think I remember reading in 'The Everything Store' that Amazon has (or had?) some patents related to the Kindle, but don't remember what.

 

 

- Apple and Amazon have filed patents for technology that would basically allow for (to my understanding) an e-ink layer plus a color layer that would allow users to go back and forth, but not sure what progress either company has made on this.

 

 

http://the-digital-reader.com/2014/08/05/amazons-new-screen-tech-patents-reveal-clues-future-kindle-plans/

[glorysk87]

I wrote up some thoughts on Apple at its current valuation, all negative to start. 

 

Interested in any feedback.

 

http://thesovagroup.com/is-there-a-worm-in-apple/

 

Silly article, in my opinion. Just a regurgitation of the very elementary and "popular" viewpoint as of late.

 

Everyone, recently, is arguing that Apple is dead from a product perspective.  There are some good arguments there. Extended replacement cycles, market saturation, slowing growth, etc etc. It's become the trendy way to talk about Apple. "Oh, they're a stale dying company." Eh. I have a really really hard time getting on board with that. It's just lazy thinking in my opinion.

 

No one is thinking deeper.  Regardless of growth, the company still earns a staggering 30+% ROIC.  They have over $200bn of cash on the balance sheet and generate something like $50bn of FCF per quarter.  They have an unbelievable and irreplaceable intangible asset base.  They have a walled garden with exceptionally high walls that keep their users in their ecosystem.  They have some of the best developers and designers and engineers in the world.

 

Yet they're trading at a valuation level similar to airliners, a business that's has notoriously terrible economics.

 

The way I look at it is this - Apple has a tremendous margin of error here. They'd have to really really really TRY to run the company into the ground for it to be a bad investment at these levels.  They have a few hundred billion in cash and they're adding to that quarterly. They have phenomenal people working at the company. That gives them an unbelievable amount of resources and time to allow them to work on developing new products that will further their competitive advantage.

[Picasso]

They definitely don't earn $50 billion of FCF per quarter.

[jeffmori7]

They definitely don't earn $50 billion of FCF per quarter.

 

Yup, if they do, I will put most of my money into Apple right now:)

 

But if I remember correctly, they generate about that per year.

[Guest roark33]

I wrote up some thoughts on Apple at its current valuation, all negative to start. 

 

Interested in any feedback.

 

http://thesovagroup.com/is-there-a-worm-in-apple/

 

Silly article, in my opinion. Just a regurgitation of the very elementary and "popular" viewpoint as of late.

 

Everyone, recently, is arguing that Apple is dead from a product perspective.  There are some good arguments there. Extended replacement cycles, market saturation, slowing growth, etc etc. It's become the trendy way to talk about Apple. "Oh, they're a stale dying company." Eh. I have a really really hard time getting on board with that. It's just lazy thinking in my opinion.

 

No one is thinking deeper.  Regardless of growth, the company still earns a staggering 30+% ROIC.  They have over $200bn of cash on the balance sheet and generate something like $50bn of FCF per quarter.  They have an unbelievable and irreplaceable intangible asset base.  They have a walled garden with exceptionally high walls that keep their users in their ecosystem.  They have some of the best developers and designers and engineers in the world.

 

Yet they're trading at a valuation level similar to airliners, a business that's has notoriously terrible economics.

 

The way I look at it is this - Apple has a tremendous margin of error here. They'd have to really really really TRY to run the company into the ground for it to be a bad investment at these levels.  They have a few hundred billion in cash and they're adding to that quarterly. They have phenomenal people working at the company. That gives them an unbelievable amount of resources and time to allow them to work on developing new products that will further their competitive advantage.

 

Thanks for your thoughts.  I have actually been buying apple slowing over the past few weeks, but I am still looking for reasons why I am wrong.  The post was an attempt to flush out some of those ideas and look for any ones I may be missing. 

 

The one issue I have with their financials and metrics like ROIC, etc...is that the risk for Apple isn't supplier negotiations, or commodity inflation, etc, But instead the real risk is complete technological obsolescence.  You could have looked at Blackberry's financials in 2008 and thought, wow, that's an amazing company.  But, the iPhone risk was there.  I need to find the "next iPhone" risk for Apple.  In other words, what "next" technology kills Apple. 

[philly value]

In FY 2015, they did $70bn of free cash flow. LTM, $56bn.

 

Versus a TEV of about $360bn [ignoring potential tax adjustments].

[fareastwarriors]

First Glance at iPhone Maker’s Retail Revamp

http://www.wsj.com/articles/first-glance-at-iphone-makers-retail-revamp-1463712328

[glorysk87]

They definitely don't earn $50 billion of FCF per quarter.

 

Meant per year, apologies, though really you couldn't figure out contextually what I meant?

[glorysk87]

 

Thanks for your thoughts.  I have actually been buying apple slowing over the past few weeks, but I am still looking for reasons why I am wrong.  The post was an attempt to flush out some of those ideas and look for any ones I may be missing. 

 

The one issue I have with their financials and metrics like ROIC, etc...is that the risk for Apple isn't supplier negotiations, or commodity inflation, etc, But instead the real risk is complete technological obsolescence.  You could have looked at Blackberry's financials in 2008 and thought, wow, that's an amazing company.  But, the iPhone risk was there.  I need to find the "next iPhone" risk for Apple.  In other words, what "next" technology kills Apple.

 

I mean, I see this comparison to Blackberry pretty frequently and I'm not sure I can get on board with it.  Blackberry's installed base in the US peaked in 2010 with 22mm users. I don't have updated data, but as of last year, Apple's US installed base was somewhere around 100mm.  So already, you have Apple with quintuple the installed base of Blackberry at its peak. And that number is still increasing. If you look on a global basis, the disparity is even larger.  And then you also have to take into account, Blackberry's was driven mainly by enterprise, an area that Apple is just now beginning to seriously penetrate.

 

In addition, the walled garden of services that Apple has constructed around their ecosystem cannot even be compared to Blackberry's. Blackberry had BBM as basically it's only sticky feature.  Apple has inumerable features: iMessage, App store, Apple maps, Siri, etc etc etc.  It makes their customers incredibly sticky.

 

Additionally, Apple has proven very skilled at being at the forefront of taking emerging technolgies, and making them truly great. They don't need to innovate necessarily. They just need to identify where the consumer preference is heading, and "Apple-fy" it. That's the true power of the company in my opinion. And they've been phenomenal at doing that. No one out-Apples Apple.

 

I could go on for days about the competitive stronghold that they've carved out, but I should get back to work.  I bought heavily when shared crossed below $90 as I think this is a very good example of the market being irrational and overly pessimistic.

[Guest roark33]

Glory...

Completely agree with you....just throwing ideas off the wall.  You mention that these negative ideas are the popular ones....What ideas do you think would make you change your mind about apple.  Those are the ones I am looking for. 

[glorysk87]

Glory...

Completely agree with you....just throwing ideas off the wall.  You mention that these negative ideas are the popular ones....What ideas do you think would make you change your mind about apple.  Those are the ones I am looking for.

 

Hm. Very little would change my mind.  The only thing that comes to mind if is broad consumer opinion about the quality of their products drastically changed.  So if people truly started thinking that Apple was making sub-par devices, that would change my opinion. But I think that's highly highly unlikely.

[rkbabang]

Additionally, Apple has proven very skilled at being at the forefront of taking emerging technolgies, and making them truly great. They don't need to innovate necessarily. They just need to identify where the consumer preference is heading, and "Apple-fy" it. That's the true power of the company in my opinion. And they've been phenomenal at doing that. No one out-Apples Apple.

 

I agree.  What do the nay sayers always say.? "But Apple isn't innovative, Apple didn't invent the X!" 

Where X = {MP3 Player, Smartphone, Tablet, Smartwatch,...}.  What they don't realize is that this is an advantage not a disadvantage.  It means that Apple doesn't have to invent a completely new thing out of thin air which has never existed before in the history of the world, it just has to Apple-fy (I like that word) something that is currently being done poorly.  So the Apple Car may be coming, get ready for "Apple didn't invent the electric autonomous car!".

 

[glorysk87]

http://blogs.barrons.com/asiastocks/2016/05/23/apple-asks-suppliers-to-produce-72-78-million-iphone7-this-year-taiwan-media/

[LC]

Additionally, Apple has proven very skilled at being at the forefront of taking emerging technolgies, and making them truly great. They don't need to innovate necessarily. They just need to identify where the consumer preference is heading, and "Apple-fy" it. That's the true power of the company in my opinion. And they've been phenomenal at doing that. No one out-Apples Apple.

 

I agree.  What do the nay sayers always say.? "But Apple isn't innovative, Apple didn't invent the X!" 

Where X = {MP3 Player, Smartphone, Tablet, Smartwatch,...}.  What they don't realize is that this is an advantage not a disadvantage.  It means that Apple doesn't have to invent a completely new thing out of thin air which has never existed before in the history of the world, it just has to Apple-fy (I like that word) something that is currently being done poorly.  So the Apple Car may be coming, get ready for "Apple didn't invent the electric autonomous car!".

 

Man, this is the argument I made like...50 pages back in this thread!

 

That said, I don't have insight into the iphone sales cycle. So I'm thinking of apple 3 ways:

1. iphone sales continue to growgrowgrow and the stock price reflects this, and i miss out on a great investment

2. iphone sales drop and the market thinks the company is a one-trick pony which just sprained all four of its ankles and needs to be put down, so i can buy at a cheap price relative to all the future "apple-fy" products to come in the future.

3. something else happens, leaving me clueless and uninvested (par for the course).

[Liberty]

New rumors about a Siri API and a new Echo-like device (or maybe incorporated into the next version of the Apple TV?) coming for WWDC next month. The Siri API is way overdue, so that would be nice. It's also been rumored for a while that Siri is coming to the Mac on the next version of OS X (which is also rumored to be renamed MacOS...).

 

Rumors rumors rumors. We'll see.

[CorpRaider]

Why can't I replace the battery on my MacBook pro?

[rkbabang]

Why can't I replace the battery on my MacBook pro?

 

Apple would prefer you buy a new one rather than a new battery. BTW it isn't impossible to replace it, just extremely difficult.

[DCG]

That's unfortunately an example of something Apple does that makes a lot of people hate them.

[Liberty]

Why can't I replace the battery on my MacBook pro?

 

Apple would prefer you buy a new one rather than a new battery. BTW it isn't impossible to replace it, just extremely difficult.

 

Most consumer electronics are past the point where you should get a screwdriver and fix it yourself. If Apple encouraged people to try to open up their iPhones and Macbook Pros themselves to try to figure out what the problem is, on average they'd probably cause more damage than they would fix (and the number of people who would want to do this is likely very low single digits anyway, so why not optimize for the vast majority of people?). Batteries used to take up maybe 1/3 or 1/4 of a laptop's volume and be in some corner, easily accessible from a little trapdoor. Now most of the volume of a super-thin laptop is batteries (no more DVD drives, and the motherboard is now tiny -- look at the new Macbook), and to keep it thin and reduce the number of seams and screws, everything is packed together very densely and the frame of the laptop itself is mostly milled out of a single block of aluminum...

 

In short: If you want a new battery, bring your laptop to Apple and they'll do it for you with their specialized tools to open things up and seal it back up properly.

[rkbabang]

Why can't I replace the battery on my MacBook pro?

 

Apple would prefer you buy a new one rather than a new battery. BTW it isn't impossible to replace it, just extremely difficult.

 

Most electronics are past the point where you can get a screwdriver and fix it yourself. If Apple encouraged people to try to open up their iPhones and Macbook Pros themselves to try to figure out what the problem is, on average they'd probably cause more damage than they would fix. Batteries used to take up maybe 1/3 or 1/4 of a laptop's volume and be in some corner, easily accessible from a little trapdoor. Now most of the volume of a super-thin laptop is batteries (no more DVD drives, and the motherboard is now tiny -- look at the new Macbook), and to keep it thin and reduce the number of seams and screws, everything is packed together very densely and the frame of the laptop itself is mostly milled out of a single block of aluminum...

 

In short: If you want a new battery, bring your laptop to Apple and they'll do it for you with their specialized tools to open things up and seal it back up properly.

 

I agree with all of that when it comes to phones, but the expected life of a laptop is longer than for a phone. In fact I expect any laptop I buy to outlive 2 batteries, if not 3.  I wouldn't have that expectation for a phone.  It is an expensive inconvenience to not be able to do it yourself.

 

[CorpRaider]

Yeah, probably going to switch to a chromebook or even a PC when this MacBook goes kaput (this is like my 4th one so I'm a longtime mac user), thus de-tethering my main hub from their software universe.  Not being allowed to upgrade RAM/paying them ripoff prices is pretty annoying (actually you could upgrade that in the MacBook pro at least when I bought this one; I also put in my own SSD) but the inability to replace a battery is a deal breaker.  I could replace my battery and upgrade ram when Jobs was alive...just saying. 

[Liberty]

I agree with all of that when it comes to phones, but the expected life of a laptop is longer than for a phone. In fact I expect any laptop I buy to outlive 2 batteries, if not 3.  I wouldn't have that expectation for a phone.  It is an expensive inconvenience to not be able to do it yourself.

 

How long do your batteries last and what do you do to them?

[Jurgis]

FYI, a number of PC laptops don't allow to replace a battery anymore either. Check before you buy.

 

It is partly annoying, though in most cases batteries of my PCs/phones outlive the item itself (something else dies before battery dies). But then I usually don't need long battery times on laptops and I've been lucky so far with the phone. Some of my friends had worse experiences where the battery goes in 1-2 years and you have to replace a perfectly good phone. I Mr. Money Mustache and keep my phone for 4 years+, so there.

 

And BTW a phone costs as much if not more than laptop, so arguing that it's OK for phone to be replaced when battery goes is silly.

[rkbabang]

I agree with all of that when it comes to phones, but the expected life of a laptop is longer than for a phone. In fact I expect any laptop I buy to outlive 2 batteries, if not 3.  I wouldn't have that expectation for a phone.  It is an expensive inconvenience to not be able to do it yourself.

 

How long do your batteries last and what do you do to them?

 

I've never owned a macbook, but I've had Dell laptops where the battery holds noticeably less charge after only about a year and a half.  I've replaced it with an aftermarket battery which only lasted about a year.  I'd expect to keep a laptop 4-5+ years these days.